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Program Secrets for Large Commercial and Industrial

By August 23, 2022Energy Rant

Maybe it’s the Implementation Contractor

Classic golden opportunities in retro-commissioning include fixing the root cause of the problem rather than trying to treat the symptoms. For example, it may be too cold in a space, so what should be done? Turn up the hot water temperature, of course! No. The problem could be any number of things like a new partition (wall) being installed, isolating one space with a diffuser from another space that has the thermostat. Or my favorite – parking a 1 kW printer under the temperature sensor. We were RCx geniuses in ha school. When our room was too cold, we’d place a wet paper towel over the thermostat to give it a sense that it was colder than room temperature. Result: heat!

Similarly, I’ve seen utilities intervene in programs to take over aspects that have caused problems in the past, only to cause other issues today. For instance, realization rates may have been terrible as determined by third-party evaluators. One reaction may be to move the analyses in-house. Result: delays and a graveyard of lost projects.

One of our corporate values is intuitive analysis. That means we want engineers to be like Ham – with a sense of what the result should look like. The upshot: just because a program fails or struggles doesn’t mean the program is a bad idea. Maybe it’s the implementation contractor???

Responsibility Cannot be Distributed

The above-misguided program repair leads me to this hot tip – responsibility for results and hitting key performance targets cannot be distributed to more than one party, the implementation contractor. The minute third parties with no accountability are injected into the program process and customer journey, all bets are off. If the prime contractor has no leverage on a link in the chain, it will not work.

Priority One = Custom Efficiency

There are countless ways to slice and dice sectors and subsectors into programs. Sectors include residential, commercial, and industrial (C&I). Further splitting may consist of low-income residential, market-rate residential, multifamily, small commercial, large commercial, and so on. Sub-sub-sectors may include schools and local government, healthcare, k-12, universities, retail, etc.

If a custom efficiency[1] program is struggling while a prescriptive[2] program for large C&I is on fire, check the portfolio design. Prescriptive may be doing well while custom struggles for several reasons. First, prescriptive projects are commodities like McDonald’s hamburgers. They are all exactly the same – the diced onions, two pickle slices, ketchup, yellow mustard, and plenty of salt. They are mass-produced, mass-marketed, and mass sold for a dollar each, or whatever the cost may be today.

Custom burgers are a bit more like those from mom-and-pop joints, like the Trempealeau Hotel up the river – where everything is locally sourced, and burgers are seasoned with secret herbs, cooked to order with cheese, bacon, vegetables, condiments, and other toppings per custom order. The quality’s higher, the price much higher, and the experience is entirely different – on purpose.

Custom burgers and programs can be scaled up to be the first priority to achieve superior savings and better provide customers with expertise, many years of savings, and non-energy benefits that come with a custom solution. Furthermore, custom solutions should easily thump prescriptive on the net-to-metric, that is if NTG is determined appropriately. To do that, read Breaking Out of the Net Savings Box, published in AESP’s Energy Intel magazine. There is no way (no way) prescriptive wealth-transfer programs should have higher NTG than custom programs.

Furthermore, to increase NTG, custom and prescriptive should be paired together and led by audits, or better yet, strategic energy management with multi-year planning, at least for the largest customers. Prescriptive measures should be the last choice option – something that may have to happen due to an unexpected equipment failure.

No Opt-Outs

In many states, large energy users can opt out of the efficiency portfolio. The reasons: 1) avoid a 1-2% efficiency rider and 2) a political deal to pass efficiency legislation.

The non-reason, large customers are sophisticated and would never waste energy. After all, their profit depends on being efficient. That is bovine pucky. From apartment renters to mining companies, customers have a spectrum of interest and activity in efficiency and demand management.

If industrial customers have it all figured out, why do “progressive” utilities like Alabama Power offer best-in-class efficiency services to its customers? Alabama ranks 48th on utility electric spending at 0.0% of revenue per ACEEE’s 2021 Scorecard.

Is Alabama Power dumb? No. Are their industrial customers dumb? No. The answer is quite the opposite. Alabama Power uses efficiency services to draw manufacturing to the state and keep them there by helping them be successful. Every net dollar saved slides straight to the bottom line.

Therefore, the theory that any customer class, including large industrials and manufacturing, does all they can to save energy and cannot benefit from useful program assistance doesn’t hold water.

Next Up

In three posts (this one and here and here), we’ve covered ten categories of efficiency and demand management better than best practices. A few remain, and then we will wrap it up.

[1] Custom efficiency programs, as it sounds, provide incentives commensurate with savings (energy and demand) for an efficiency project given the specific application of operating parameters, equipment performance, and hours of use for that project.

[2] Prescriptive programs provide incentives typical of thousands of applications of a technology to a specific building type, which can be sliced and diced as described above. Only very simple calculations, like n times savings/n, or none at all, are required.

Jeff Ihnen

Author Jeff Ihnen

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